Reckitt, the owner of Dettol and Lysol, confronted a challenging third quarter as its nutrition sector experienced significant supply disruptions, influencing the company’s sales performance.
Reckitt’s overall net sales decreased by 0.5% on a like-for-like basis during the latest quarter. However, despite this decline, the company achieved a modest annual sales increase of 0.4% by 30 September. This growth was primarily driven by a 2.8% uplift in the health and hygiene sectors, partially counterbalanced by setbacks in the nutrition division.
The nutrition business faced a severe 11.6% decline throughout the year and a more pronounced 17.4% drop in the quarter. These declines were largely attributed to £100 million in supply complications caused by a tornado at the Mount Vernon facility in July, which resulted in the destruction of finished goods and raw materials, impairing short-term supply chains to consumers.
Meanwhile, the health and hygiene sectors showed resilience with sequential market share growth and continued volume increases, achieving rises of 0.7% and 1.2% respectively in Q3. The hygiene department notably reported a 3.7% sales increase for the year and a 2.1% uplift in the third quarter, bolstered by significant gains in market share from products like Lysol surface disinfection sprays and wipes. Other brands, including Finish, Air Wick, Vanish, and Harpic, also supported this growth trajectory.
Looking forward, Reckitt has set a target for full-year like-for-like net sales growth between 1% and 3%. While projections for the health and hygiene portfolios suggest growth at the lower end of the mid-single-digit range, the nutrition business is expected to see a high single-digit decline, which is an improvement from earlier forecasts of a low double-digit drop.
Chief Executive Kris Licht highlighted the company’s resilience, stating, “Our categories are resilient, our brands are strong and we are now seeing a more balanced algorithm for growth.” He emphasized that Reckitt remains on track to meet its net revenue and profit objectives for 2024, with strategic investments aimed at competitive categories and markets, enhancing market share in health and hygiene portfolios, and adapting to a stabilising US nutrition market.
Reckitt, despite facing substantial challenges in its nutrition segment, remains committed to fulfilling its 2024 targets. The company’s strategic focus on its health and hygiene sectors, alongside efforts to streamline operations and improve market competitiveness, underscores its forward-thinking approach in navigating the complexities of a changing market environment.
